tv Closing Bell CNBC August 13, 2013 3:00pm-4:01pm EDT
for icahn associates so far this year. he has had very few losers among his 21 holdings. so as we say, this is the magic touch of mr. icahn. thank you for watching "street signs," everybody. "closing bell" is coming up next. welcome, every -- welcome, he said, everybody, to the "closing bell." it's a good start. bill griffeth here on the new york stock exchange. the stock market kind of steady here. boy, do we have some great stories to tell today. >> low value, and it seems like the big stories are elsewhere. we'll get to them. i'm kayla, in for maria, back tomorrow. we have a big show for you. it seems carl icahn couldn't let bill ackman be the most talked-about activist this week. in the last hour, the 77-year-old billionaire tweeting that he has taken a large position in apple and that he told ceo tim cook he wants a big share buyback now. and would you look at apple's
stock? take a look at what it's doing right now. it's up nearly 5%. of course, it already has a big buyback and the thought of it being bigger is something the investors like. >> arguably the most successful of all of the activist investors going after one of the largest companies in the world and pushing it up 4%. even apple responded. they said that, quote, we appreciate the interest and investment of all of our shareholders. tim had a very positive conversation with mr. icahn today. i tweeted out a little while ago that the translation of that is, simply, "gulp." >> and to think this was one time a target of shorts. you had david einhorn in there last year. >> exactly. >> shorting the stock. and now to think carl icahn is calling it undervalued. certainly one to watch today. >> much more coming up over the next couple of hours, i'm sure. also, it's called the hindenburg, and it has the trading floor buzzing, because the omen is back in play right
now. so even as stocks are rebounding today, you can find out why some are predicting a stock market disaster is looming. we will look carefully at that coming up a little bit here. and one merger is grounded. look at the stocks of american airlines and u.s. air, both depending on a deal to go through. american airlines down 48%. u.s. air down 11.5%. the proposed merger, the department of justice says consumers would be hurt and is suing to block that deal. so far, only investors are getting crushed today. we'll talk to a few lawyers who have opinions on that deal. >> let's get you caught up on the markets, how we've been trading so far this tuesday. the dip in the morning happened again, and then it returned. the market up 47 1/2 points on the dow at 15,467. that has been the trading pattern of late. nasdaq, higher. apple's helping right now, up 17 points or about .5% at 3,687. and the s&p 500 index is up 5.8
points at 1,695. bob pisani, apple story is a good one. >> reporter: apple will normally do about 10 million. icahn's definitely having an influence on the stock. we're probably at the highest level since january right now. here's the tweets here. had a nice conversation -- this is carl icahn -- with tim cook today. discussed my opinion about a larger buyback should be done now. we plan to speak again shortly. we currently have a large position in apple. we believe the company to be extremely undervalued here and the first part of what i was saying, mr. icahn tweeting it out. i know this is a love fest here going on between mr. icahn and mr. apple. but people down here were really amazed. look at what's going on in this day and age. an activist investor talks to the ceo, the investor tweets he's pleased, he has a position in the stock, the company says nice talking to you, they issue a statement, the stock is going up.
everybody is treating it normal, but it's rather remarkable to see what is going on in the modern world. people down here talking about how different the stock trading has become in this day and age. and looking at the dow jones industrials. bill is right. what's interesting is dennis lockhart, with the federal reserve, of course, in the middle of the day noted that the economy was uneven and the data does not show a clear economic picture. that put down on whether the tapering would occur. the bond market has no part of that. if you'll notice, we've seen an elevation in bond yields all throughout the day. the bond market believes tapers is coming and i would put more in stock with what the bond market thinks. if you don't think it's the case, look at home building stocks. they're concerned about tapering because cutting off purchases of mortgage-backed securities would raise mortgage rates. so we've seen homebuilders fall throughout the day. these are off of the lows. and real estate investment trusts also very much dependent on interest rates, also among the weakest groups today. got a lot going on down here today. guys, back to you. >> that's for sure. let's talk about this -- what
has turned out to be a newsy. joining us is david from mainstay, tim from tamron, david from convergeent, and our own rick santelli. anybody own shares of apple? rick, you're out of this, i know. anyone? >> no, we don't. >> no one holds apple here. >> we own some apple. >> oh, well, you didn't raise your hand. so what do you think of carl icahn going after apple here? >> i think it's very interesting for the stock. certainly has a long-term history of success stories and even more recently taking the position opposite bill ackman on herbalife. so it's positive news for apple. we've seen the nice bounce for the stock. certainly a holder of the stock. >> would you like to see a greater, larger share buyback as carl icahn is suggesting? >> we would. we would. >> yeah, and, bill, what i volunteer is it speaks to maybe the dynamic marketplace we all
sort of operate in. if you don't execute, there's capital, and capital comes after you. and more often than not, it's a good thing. it speaks to the competitiveness of the economy. >> you know, we talk about the dynamic marketplace. but it seems like a lot of the activist investors are going after bigger and bigger names. you have carl icahn and apple. you have bill ackman going after proctor & gamble, ralph wentworth went after pepsi. these are names with giant market caps. is the state of activist investing changing, tim, i'll throw that question to you. >> i don't know if it's changing. i think the economy is bigger, the market is bigger and the game's gotten a bit bigger. that's not what we do here. we're fundamentally driven and bottom-up. i think it speaks to the nature of the economy. i think it's a good thing. if you don't allocate capital well, if you don't produce returns that are outweigh the cost of capital, you know, there are people out there that do that and do it well. and i think on balance, it's been a good thing for the economy and it's been a good thing for u.s. capital markets.
>> david, what do you think of all of the -- >> but i think -- >> hang on one second. would you own apple here? i mean -- or what do you make of what carl icahn is doing to apple shares? >> we tend not to focus on individual stocks. the things we're tending to focus on now are things that are sort of unloved and undervalued. >> well, that's what he says apple is. >> sure, sure. some of the things we're focusing on are emerging markets. they're undervalued relative to the u.s. in fact, they're kind of at a point where in the last five years this is the most undervalued they've been relative to the u.s. >> what catalyst, then, do you expect to move the emerging markets? i mean, we've heard from some other contrarians out there that are looking to that very unloved group right now. so what do you expect to happen? >> i think it's just the normal capital flows. so at some point, the market wakes up and it realizes where value is. and i think it's the emerging markets. equities have been left on the side of the road. once people start paying attention to them and understand what the value is there -- because they have strong
earnings, they're on the same debt levels that the u.s. has, they'll flow back into that space. >> rick, the other piece of news is the comments from dennis lockhart in the middle of the day saying whether there's not enough data to taper in september, october could be on the table. this goes against what he said even just a week ago. what are you seeing in the market? is it reacting to those comments at all, or is it just in one ear and out the other, at this point? >> over than 2.71%. >> i think that the market definitely was helping the equity markets, based on his comment. as a matter of fact, if you look around 10:15 to 10:30 eastern, the stock market was sold off. the fed did a practice round or technically a practice round of reverse repos, and it seemed as though that was it. the stocks went down. mr. lockhart's comments, kind of the "dog ate my homework," not enough time, the heart isn't in the taper anyway, that pulled the day out. interest rates through all of this? we'll have the second-highest
yield close in two years, 2.74, is the only higher yield close from the day after the fourth of july. and i'll tell you what, as i look at stocks and everything we've said about the stock movement today, you know, it'll settled at 15,420, went down 80 points and made the low, went 80 points up and made the high, i would think the old trader in me would look for an unchanged close, 44 points on the table. >> yeah, the bias is to the downside, art cashin tells us, although not by a whole lot. david, what's your best investment idea right now besides apple? >> well, we like -- we like the regional banks in this environment. we continue to think that this -- what we've seen in interest rates, the most recent move, the steepening yield curve, that improves net interest margin for the regional banks. currently and going forward. because we think that rates continue to go up. >> okay. tim holland? >> yeah, to piggyback on what
david said, bill, we're pretty constructive on the smaller banks, as well. one we own in the small cap fund, the diversified fund, first merit, northeast ohio, did an acquisition that gets them into wisconsin. the yield curve is helping. if you go through the quarterly results, credit continues and loan growth is okay, and that speaks to a decent economic environment here at home. >> very quickly, david. anything domestically you like here? >> i tend to focus on the things that are the most uncomfortable to own right now, which are natural resource equities. some of those are trading six to eight times earnings, to give you an idea of how oversold those are. the gold miners in the past three days are up 15%. >> so they're starting to become comfortable. >> they are -- well, i don't know if they're comfortable yet, but they're starting to come in the news. >> you are the great contrarian, aren't you? thank you, gentlemen. thank you for your thoughts. >> thank you. >> thank you. >> heading toward the close. 50 minutes left in the trading session. the dow is up 43 points. >> right now, the s&p is up just
about 5.5 points, nasdaq up 16. apple the big news of the day. we'll have much more on that news, that carl icahn is taking a big stake. up next, the justice department filing a lawsuit to ground the $11 billion merger of u.s. airways and american airlines. both airlines are vowing to fight back. but their stocks are getting rocked today. we'll find out what's behind the government's decision. then, is it ever too hot for fried chicken? yum brands is blaming poor sales on warm weather in china. we'll take a closer look at that claim, and also ask if the stock has room to run, weather permitting, of course. that and much more coming up on the most porch hoimportant hour trading day. stay tuned. farmers presents: fifteen seconds of smart. so you want to drive more safely?
another big story today. the justice department dropping a bombshell on the airline industry by blocking the merger of american airlines and u.s. airways. phil has the details. a shocking story, here. phil. >> reporter: yeah, nobody saw this coming, certainly within the airline industry, it was unexpected. it comes down to whether or not you believe the merger will hurt competition and result in higher fares and fees. here's what happened today. the doj filing an antitrust lawsuit, saying it will hurt
competition. the lawsuit will slow down amr's exit from bankruptcy. remember on thursday, creditors were supposed to vote on a bankruptcy exit plan, which would be contingent on the merger. u.s. airways ceo doug parker says this merger will no longer happen in the third quarter. they're not giving up on it completely. in fact, they say they plan to fight the doj lawsuit. both parker as well as tom horton, the ceo of american, are out with letters to employees today, defending the benefits of this merger. so for the time being, instead of these two airlines combining and becoming the largest in the country, they will remain where they are, with american being the third-largest airline in the u.s. after united and delta, and there you see southwest is number four, and u.s. airways the fifth-largest. according to the doj, this is all about a merger that would ultimately result in higher fares, higher fees. in fact, today, during a conference call, the assistant
attorney general said we believe there will be hundreds and hundreds of millions of dollars in consumer harm if this merger goes through. well, i'll tell you what was really harmed today. shares of lcc, u.s. airways' shares, down 12%, or almost 12% right now. the biggest single drop since august 2012. it's lopped off more than $200 million from the market cap. bill, we're showing you this chart going back to february 13. that's when these guys announced their merger. after that, the airline had a nice little run. today, everybody is pulling back. >> european officials approved this last week when the two agreed -- the two airlines agreed to give up some slots at heathrow and in philadelphia. weren't they willing to do the same thing for u.s. officials? wasn't there some give-and-take there, as well, don't you think? >> reporter: the doj won't discuss what kind of discussions were had between the airlines and the doj. but it's clear by going with this lawsuit, and on the conference call today, bill, the doj said repeatedly we believe
the best option here is a complete block. that tells me that it's unlikely there will be enough concessions offered up here to salvage this, at least near term. obviously, everything is up for negotiations. >> okay. >> reporter: that was very clear during the conference call, that this -- in their opinion -- has to be stopped. >> all right, phil, thank you very much. very important story. we'll get back to more on that in a moment. but we're juggling top stories right now. back to the icahn/apple story. scott wapner is on the phone. i gather you've talked to carl. what'd you hear? >> reporter: i did, indeed, bill. in fact, i just got off the phone with carl icahn a short time ago who reiterated a little bit of what he put out on twitter, that he had a good talk with tim cook, the ceo of apple. he also said in his call, you know, he believed that the no-brainer for apple to use either its extra cash or to borrow money and do a large buyback, and he said if he did a
large buyback, the stock value would be enhanced, in carl's word, tremendously. he reiterated the fact that apple is very undervalued, in his words, a company that has great product. he said they had a very amiable conversation, that carl speaking with tim cook, and that they do plan to speak again shortly. he also, you know, his comments -- [ audio difficulties ] -- on the program last evening, what apple is like now versus what the company was under steve jobs. so i asked carl about larry's comment that apple seemed to be going down without steve jobs, and carl would say a lot of people thought netflix was going down, too. that was his response to that. of course, we know that carl has a big position in netflix, and one that's been incredibly profitable for him. he's made, i think at this point, at least $1 billion. so that's been a big position for him.
this is the latest one. this is creating the biggest wave on wall street. that's carl icahn taking a very large position in apple. speaking with tim cook, planning to speak again, and urging the company to do a large buyback. bill? >> well, scott, i'll take it from here, because i have a question for you, which is that apple has become something of a battleground stock for a lot of hedge funds. i misspoke earlier and said that david einhorn was short. of course, my memory misserved me. he was actually long. and as far as we know, he continues to be long. we'll get some 13-f filings tomorrow. and i think a lot of people will be watching to see if other hedge funds have added to their apple shares. i know you talk to a lot of the hedge fund managers. do you feel carl has momentum behind this trade, too? >> i think carl feels that anytime he does anything, he has his own momentum. he creates his own momentum. einhorn has been in it for a while. it's large position for him. he made some waves several months ago where he was calling on the company to better utilize its cash, to increase its dividend.
i'm not sure of the other, you know, big hedge fund managers at this point who have positions. >> right. >> carl creates momentum all by himself these days by taking these big positions in some of the stocks. and he's done so incredibly well this year on many of the names, whether it's chesapeake or herbalife or, you know, obviously now he hopes to do the same with apple. but netflix and so many other names he's been in have done well. we should also say he does have a position in newance, which i'm sure has been mentioned already -- >> right. >> -- which is obviously the maker of siri. >> scott, you probably didn't get into too many details, but you did mention that he feels like they should do more to increase the chances of a share buyback, whether they should borrow money to do it or whatever. but they've already done that. they issued a huge bond that was large -- very successful in order to increase their share buyback. and we all know that so much of the cash is overseas, and there
would be huge tax liabilities to repatriate that. so i wonder how much maneuverability tim cook really has to increase his share buyback to please carl icahn at this point? >> maybe if they could borrow more. the repatriation issue did come up in our conversation, and obviously, that's a significant issue not for apple -- not only for apple, but for a large number of companies and a large number of technology companies. what's going to be really clear from this point forward, bill, and really interesting, i should say, is to see how this relationship now goes between carl icahn, a guy who certainly is not afraid at all to shake things up -- no disrespect whatsoever to david einhorn, who got in and made waves and went public and urged the company to do it and took them on in ways that many investors have simply been unwilling and didn't have the wherewithal to do. but it's a little bit different, i think, now that you have somebody like carl icahn
weighing in, and it's going to be fascinating to watch how that relationship evolves over the next several weeks and months. as carl said, he does plan to speak in short order again with tim cook. he described their conversation, as i said, as amiable, and we'll just have to see what goes on from here, how much pressure thinks he can put on, or even needs to put on, how receptive tim cook is to the idea of doing a digital buyback. and for that, i honestly don't know, and carl didn't say and wouldn't say what tim cook's reaction was to his idea. >> all right. thanks, scottie. >> thank you, scott. we'll have more on that. we want to hopscotch now back to the other big story of the day, which is, of course, airlines, and why the government would seek to stop a deal between american airlines and u.s. air that's been in the work for about a year allowing delta and continental. northwest also merged, and domestic airlines have done mergers. >> and american/u.s., as we
mentioned, was approved by e.u. officials last week, august 5th. joining with the thoughts, bruce schneider and john griggs, and our own david favor, been doing great reporting on this. what are you hearing on the latest on this, david? and where do we go from here, do you think? >> i think phil said it earlier, bill. this was something of a surprise. you would imagine it wouldn't be a complete surprise. it's always been a possibility that the antitrust division of the doj would seek to block this merger. but nonetheless, something of a surprise to both sides here. and i think what's important is, you've had a lot of investors trying to figure out, okay, what's the landscape going to look like here in terms of, has this got a chance of closing? is there an easy fix, perhaps? because the last deal that was challenged was the bhev rage -- the beer deal between constellation brands, involved anheuser-bus anheuser-busch. there was a clear fix there, and they got it approved after it was challenged by the doj. here, not what i'm hearing at all, bill. in fact, on the -- on the u.s.
air/amr side, there is a clear belief there is not an easy fix, and that, therefore, they will have to fight this in the courts and see if they can succeed. that becomes a big if. there had been a handful, a very small number of victories by companying seeking to merge when they've been blocked or tried to be blocked by the doj. but there haven't been many that have been able to win that case. >> no plan b there. >> yeah, bruce, you know, it's interesting when you look at some of the data here. they cite a lot of cost increases on some of the tickets. they also look specifically at the press release, at reagan, national, d.c., seeing they'd have a monopoly. nearly 70%. why couldn't they have a fix, selling off some of the gates that are problematic? is there a fix, albeit maybe not an easy one, from what you can tell in the deal? >> this is different from some of the other challenges. this isn't about city pairings. they're alleging something much more nationwide. they see a comfortable arrangement among the carriers,
and they see u.s. air as being a price maverick that could have held that back on its own. >> and, john, if you're advising both of the airlines, what would you tell them? is there a possible plan b to try to solve this, short of countersuing and trying to appeal this? >> no, i don't think there's a plan b here at all. i agree with bruce. the big surprise here is not the fact that there's a lawsuit so much as the fact that the lawsuit is much more pervasive and serious, i think, than people might have anticipated. the u.s. air advantage program is a big deal nationwide. the just general use of the admissions of the two ceos. really serious and very clever complaint. and they identify 1,000 city pairs where they say this is in violation of the guidelines. and the market seems to think it's not going to happen, if you look at the share prices. so it does not look good. they're going to have to litigate it all the way to the death, and maybe experience the death of the deal that way. >> david, you know, there are a
lot of arguments that surround american when they first declared bankruptcy, one of the arguments was they want to save their cash to make them more attractive to a u.s. air for potential deal. in the antitrust proceedings, they said they needed the deal to survive, but now the doj is saying, american is likely to exit bankruptcy as a vigorous competitor. what do you think the fate of american is? could they do another deal with another competitor? do they stay in bankruptcy? what happens to them? >> it would be clear if this is successfully blocked that the paths towards consolidation are more or less completely blocked for an american. the question then becomes well, you have to emerge, this is the way that they are emerging from bankruptcy, the restructuring has been going on for years. this has been a very complex deal to have negotiated, of course, in agreements with the creditors, who include the company's unions and the like. u.s. air is hurt here. it is fair to say that american is hurt more and one will question in terms of its ability to be fully capitalized as it needs to. phil has talked often, kayla, they have a big plane contract out there. they're buying a lot of planes.
well, if they are alone again, can they afford to buy all of those new planes that they have to? >> right. >> those are some of the key questions. >> i have -- by the way, kind of a question here, bruce, and i'll ask you, we got the okay on northwest/delta, united/continental, why not u.s./american? is it a matter they came late to the party and the consolidation is already to the point it would be anti-competitive for anybody else to get together here? >> i think that everybody knew that this was going to be the last consolidation, if it occurred. the question was, was it going to be before or after this transaction. the doj did a retrospective on some of those mergers and has concluded that at least as to ancillary charges, prices have gone up and the quality and total number of flights has gone down. so i think that they're not happy with their retrospective and not going to let this go forward, and to add another to that chain.
>> yeah, crazy. thank you all for your thoughts. very important story. david, let us know if you hear anything else. >> sure thing. heading toward the close. we have 30 minutes left in the trading session here with the dow up 48 points. and coming up, we have more on the carl eicahn/apple story. he buys the stock, tweets about it, the stock goes up. >> created about $20 billion in market cap just by speaking to tim cook and tweeting about it. >> up 5.3% right now. >> pretty amazing. we'll have more on that. meanwhile, yum brands blaming hot weather in china for slumping sales, and in that nation, really? the stock's getting hit hard. we'll hear from somebody who says it's a very appetizing buying opportunity. and the humanity. art cashin said the hindenberg is hovering above the market. find out how worried you should be. stay tuned. [ dad ] so i walked into that dealer's office
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mix, more it had to do with chinese consumers looking for cold -- cold, fruity drinks -- yes, thank you -- and ice cream as part of their dining, it says here. with the stock near 52-week highs, is this a buying opportunity? let's talk numbers on yum brands. on the technical side, carter worth, oppenheimer. on the fundamental side is steve cortese, the founder offer have cruz tjm. the stock rallied on recovery hopes in china. is it too risky to go with it right now? >> it is too risky. i say yuck. blame it on the rain, a terrible song by milli vanilli, and also a terrible excuse, blaming weather for poor performance. we've seen poor performance in china from yum month after month. this was a great company with powerful brands. unfortunately, they put their chips on the china bet, and it is now one of the weakest markets in the entire world. >> milli vanilli didn't really sing that song. >> that's true, too. >> carter, what do you think of
yum? >> the yuck part is right when you speak of bird flu. let's talk about the chart, and that part is delicious, quite frankly. the five-year trend, like every other stock, a low in '09. very orderly. draw the trend line and take your ruler and do it. what's important is the sideways period for the last 18 months as it keeps probing the 73 level over and over and over. that's when a conventional buy juncture is, how a stock gets to a live 8, backs away. each time it backs away less and less and ultimately exceeds that level. this is what we would plan for, a breakout at 73, looking for 80 and change. and what it's worth, anecdotally, the whole street hates it. holds and sells, 17. people are not in the name. >> but you would take it here? >> oh, yeah. that's one of the reasons -- and whether it's the weather or bird flu -- >> yeah. >> -- ultimately, this is a good setup, equilibrium always ends -- >> you're going to sell your shares to him, steve? >> yes, i am. i think if you want to be in the fast-food space, you're much better off in domestically
focused name, wendy's and chipotle. >> all right. thank you, guys. appreciate t good stuff on yum brands. a fun sector to do due diligence in. chipot chipotle, yum brands, no worries. 0 minu 30 minutes before the closing bell. the nasdaq is at 19 on heavy volume today. >> but some great individual stories. we were telling you about carl icahn setting his sights on apple on what he called undervalued, telling scott wapner a big share buyback would boost the stock. we'll discuss what icahn's latest move could mean for the technology giant. and also another tech one-time giant, blackberry, had the first smartphone ever in 1999. shares spiking again today on reports its largest shareholder may take it private. we'll hear from somebody who says this company is doomed regardless of whether a deal happens. that story is coming up on the "closing bell." if you're serious about taking your trading to a higher level, tdd#: 1-800-345-2550
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activist investor carl icahn is making an investment in apple. jon fortt, what's the latest? >> reporter: a remarkable bunch of statements. icahn tweeted he amassed a large stake in apple. apple issues a statement saying they had a positive conversation. after icahn's tweet, the volume in apple shares shoots up 300% over the hour before. now, icahn says he wants a bigger stock buyback. he wants it now. what would be the impact of that? it would, obviously, boost earnings per share. unclear how apple would pull off a larger buyback. apple's board has already authorized $60 billion for buybacks, spent $16 billion last quarter for that on the open market. and take a step back. part of what this is shaping up to be is a showdown for tim cook. commentators have wasted no time on twitter talking about what steve jobs would do in this situation. i can tell you this, jobs did not like the idea of apple being pushed around by shareholders. apple doesn't want investor
activism to deter, and carl icahn has moved the stock, and he's moved it more than the rumor mill can. >> yes, thank you very much, jon. can you imagine if steve jobs was still in the ceo wing? this wouldn't have happened. >> i don't think it would have ever happened. >> i could be wrong. >> i don't think so. i think the market cap was fairly high. >> yes. >> and apple is down pretty -- well, from its low of 385, it's up more than $100 per share, up 27%. >> down 31% from its top. >> -- the market cap wouldn't have happened with steve jobs either. >> that's true. there would have been no need. >> devil's advocate. >> carl icahn roaring again. apple hearing the noise. the latest case of activist investor, the mouth roars, icahn announcing on twitter he has this large position in apple. he believes the technology company to be undervalued, and this, of course, on the heels of his war over dell. dan loeb targeting sony. the soap opera over jcpenney, and on and on and on.
>> it's been the year of the activist. for carl icahn, he's been one of the best performers. in this one tweet he sent this afternoon, apple shares soared up about 5%. so if icahn bought $1 billion worth of apple, that was a $50 million tweet. is that right or fair? that's the big question that a lot of people are asking, certainly not apple shareholders, but something to debate. with us is activist investor greg taxen of the clinton group. greg, you're an activist investor, but you don't agree with the very active, vocal, media-friendly style of bill ackman and others. should these investors be so vocal and pushing so hard in industries that some people could argue are not maybe their wheelhouses? >> well, i'm not sure i would actually characterize my view that way. i think carl icahn has certainly been an effective activist. been great for shareholders in almost all of the companies he's been involved with, as has a lot of other activists. i think people use different styles and approaches, and ones
that best suit their -- their own personality and mentality and those of their investors. carl icahnst -- eicahn is hard o disagree with apple. they could do a buyback. he's one of the few people who has the credibility to probably go toe-to-toe with tim cook and with the apple board, and i suspect as in many places where he gets involved, he'll do well by his fellow shareholders here. >> but, i mean, the question becomes do you need to be an expert in an industry to take a position in a particular company and to become an activist? a vocal critic of a ceo to advise them over their shoulder what they should be doing to increase shareholder value? i mean, does carl icahn know that much about technology that he can make an informed decision -- >> or does he just know that much about a balance sheet? >> right, exactly. >> well, you know, my view is certainly that investors are the people who own the company, after all, and so, bill ackman
owns 18% of jcpenney. if he's going to make lots of mistakes there, he's going to eat his own cooking. he's got every incentive to learn a lot, to surround himself with people who are very knowledgeable, you know, either consultants or former executives, or others, and try to get it right. carl icahn has proven he can get it right a lot. it's certainly the case that management teams don't always have all of the answers, even though they are inside that industry for a long time. i think it's very helpful to have outside investors who've got money on the line take a hard look at the business with lots of help from outside experts. and to provide their ideas and thoughts, especially to underperforming companies or companies that are subopt imized from a balance sheet perspective or otherwise. >> greg, the other big activist situation that's been very public today, bill ackman resigning from the jcpenney board. i know some activists are split over whether it's even helpful to take a board seat. this is a very public reason or example of the cases in which this doesn't really work. and you can't really effect
change, you can't do what you want. and even if what you want, you're going for it, sometimes the board doesn't agree with you. >> that's right. and, look, we've been very effective putting industry people onto boards. people who are executives, you know, former board members of other companies in the industry, they have a lot of credibility when it comes to changing strategy or making suggestions in board rooms. i think it's harder sometimes for the activist himself or herself to go onto a board, especially alone, and to try to make changes in these complex organizations. sometimes you need the credibility of an operator to be there alongside you, or to be there in your stead. it's worked for us at red robin. wet seal. at radeon. all companies where we brought outside industry people who had a major impact on operations to the benefit of all shareholders. at jcpenney, ackman went on that board along, along with steve roth, didn't bring industry people with him, and that may
have -- i don't know -- maybe the source of the difficulties on that board and in that board room. >> greg taxin, thank you very much. appreciate it very much. >> my pleasure. ledding toward the close. very small bias to the sell side. we're holding steady with the dow up about 37 points here. >> and stocks may be higher today. they're pretty range-bound, though. coming up, art cashin explains why something like a hindenberg omen may come in to play soon. it sounds scary, and apparently -- >> it is scary, yeah. you think that wouldn't be good news for stocks, you'd be right. we'll have that story. i found out, an old, old friend of mine coined the term, hindenberg omen. we'll get to that. why is new york state financial services superintendent cracking down on the tiny bitcoin business? he'll join us to tell us, coming up later on "closing bell." my mantra?
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low of 385 on april 19th. our own scott wapner spoke to icahn who said a large buyback is a no-brainer for apple. as scott said, mr. icahn, he does create his own momentum by taking these positions. as our producer, john milloy points out, icahn associates has had few losers. almost all are up. some are up huge. netflix has rocketed up 190%. federal mogul, up 113%. webmd, up some 130%. herbalife, the subject of a billionaire brawl you watched right here on cnbc between icahn and bill ackman, it's up almost 100%. chesapeake, a relative laggard, up some 50%. kelly, back to you. >> well, josh, to have a laggard that's only up 50%, i mean, that's pretty much -- >> reporter: not bad. >> carl icahn has tweeted five times in his lifetime, and he's
made $50 million roughly -- >> and he even said it at delivering alpha, i tried to sell netflix, but my son told me to keep it, because he watches netflix. you know, it's up triple-digit percent. >> the activist son. >> yes, 3 billion to manage of his own, we should note. 10 minutes before the closing bell. the dow up 35 points. >> brian bellski has been one of the bigger bulls on wall street, but now he said it's becoming harder to justify higher stock prices. and later, rick harrison takes us inside the state of the pawnshop industry, and what that says about the health of the american consumer.
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about 8 minutes left in the trading session here, getting ready to close out the day. the dow is still in the green, barely. and as the market continues to make the way way higher, some are questioning whether valuations are justified at these levels here. >> the question everyone has been asking as we keep climbing higher, are stocks getting too expensive? for that, we asked joe from u.s. trust and brian from bemo capital markets. thank you for being with us. brian, you've been quite the bull. where are you finding value now, even as many are saying the market is overbought?
>> you know, it really depends upon your timeframe, kayla. remember, we've been bullish for a long time and we think we're in the midst of the next great secular bull market. but from a near-term basis, we just think that stocks are fairly valued at these levels, especially considering the point we've seen three to almost four p/e points this year, number one, which is our big theme over the year. it's already played out. and number two is that we believe the next phase really has to be driven by earnings growth and sales growth, and that really has not been prevalent the last couple of quarters. >> yeah. >> so it's okay, folks, for the market to take a bit of a breather. >> what do you think? >> yeah, bill, we had a great first half. >> right. >> so a little breather here. >> we had a great year the first half. >> if it ended now, it would be great. to brian's point, another catalyst would be global growth. europe is looking better. china is settling down. the emerging markets are kicking. another catalyst, we'll get it toward the year end. >> what do you think the catalyst will be? we have so many headwinds we're
looking at with the possible tapering this fall, the debt ceiling situation, the continuing resolution, spending with congress -- >> that's like groundhog day. we heard that before. >> right, sure. >> it will come back again -- >> it's hard to believe that now is the right time to get in some of the trades, like europe. a lot of people have been ringing the europe bell -- >> our clients look three, four, five years out. they're looking for opportunities to come in. some have missed it. at the same time, i still believe in globalization, u.s. corporations, information technology. we're going to grind higher. >> you're taking money off the table? is that what you're saying? >> we would lighten up, bill, a little bit, especially considering we've had such a big run. we never advise market timing. we're like joe, three, five years from now, the market is significantly higher. things are not linear for long. it's okay to take a bit of a breather. i can't tell you, bill, how much pooh-poohing that everyone is poo pooing tapering, the budget. it was taken care of before, it will happen again. what if it doesn't? that will be the big shock if
those things are not taken care of the way everybody thinks they're going to. >> joe, stocks got a boost today from comments from dennis lockhart that fred taper maybe wouldn't be ready by september, maybe october, maybe beyond that. how do you play that? >> kayla, tapering is a good thing in the sense the fed believes the economy is strong enough to stand on its own two feet. so i'm not fearing tapering. and we're far from tightening. it will add an element to volatility to september and october that are volatile already, so get ready. as a pullback, it's a buying opportunity. >> a couple of guys with the sweaty palms in the short term, but the long term, liking to the horizon. good to see you. up next, the "closing countdown," so stay tuned. and apple have the best day of the year. take action at it now, up 22 bucks to $489.27 after carl icahn tweets he's in the stock in a big way. and sea world is moments away from its first earning report since going public. it's up more than 30% since the ipo. so stick around to find out
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late this afternoon with carl icahn tweeting he has taken a big position. he's already spoken to ceo tim cook, and up it goes. almost the best day of the year. if it were up 5.14% as it were earlier, it would be the best day of the year. terry, three bulls in the last two days tell me they're starting to take money off the table, starting to raise cash. what are you doing? >> well, you know what? i think the market -- we're actually doing the opposite. >> you're adding, okay. >> we're adding, looking for dips to take advantage of. i think the market -- the market in trend is in place, and we'll look for a follow-through rally. as long as money comes in, rates go higher, they're looking for places to come in. they're having a hard time finding them. >> the 10-year yield, second-highest in two years and yet the stock market ignores it. why? >> basically, it knows it has to live with them. the dividend yields have been competing with it. and, also, it's a flight to safety to some extent or another where the bond yields will
continue higher. you have much more growth possibility out of the equity markets. >> got it. terry, thank you so much. we'll talk to you later. [ bell sounding ] going out with a gain of about 30 points. much more coming up on carl icahn and apple on the second hour of the "closing bell." it's 4:00 on wall street. welcome to the "closing bell." i'm kayla and bill will join me in a moment. you heard about apple. something to bolster the market higher after carl icahn took a big stake in the tech giant. here's how we're finishing on wall street. the dow up about 32 points, and the nasdaq up about 15 points, and s&p up 5, hewlett pack and ard boeing, the i.t. sector leading. >> yes, it is. the stocks coming